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Saturday, April 25, 2009

Hedged Growth Fund Back to Breakeven

The Hedged Growth Fund was only started on October 1st, 2008 so being breakeven after nearly 7 months might not seem impressive, but the market is down 24% since the inception. So being breakeven means beating the market by a whopping 24%. It's not too surprising that this fund has outperformed the market during a down period since its mandate is to be 1/3 short or cash. Definitely only 2/3 long at most. The astonishing amount of the beat is surprising to us not to mention the fact that the fund is nearly flat with the SP500 during April. A month when the market is up over 8%.

As of last week, the fund currently has no shorts and $333K in cash which has allowed the fund to keep up with the market with a lot less risk having so much in cash. The fund will likely keep the short portion in cash until the 900s are breached on the SPs.

Over the 6 month period ending March 31st, the fund outperformed 98.6% of all funds on Marketocracy. Not too bad considering the site doesn't allow pure shorts somewhat limiting the shorting aspect of this fund. Currently the only option is too use ETFs. Not ideal, but probably good enough to get the hedge that we wanted.